GS-21 Scope and Qualifier Departure
Your firm is a New Mexico business licensed as GS-21 with a qualifying party who is also a 25% owner. He gives notice that he will resign in 30 days and move out of state. Meanwhile, the firm bids a $410,000 project at a shopping center: remove 45,000 square feet of built-up roof, install new modified bitumen, rebuild 40 linear feet of deteriorated masonry parapet, replace four roof drains, and install new counterflashing. The estimator plans to self-perform everything except counterflashing, which he will sublet to a sheet-metal firm that holds no New Mexico contractor license. The bid is due in 10 days, and the project owner wants a certificate of insurance and a copy of the license before award. The operations manager says, 'We've done parapets before; it's incidental to roofing.'
1. Can the firm self-perform the parapet rebuild and roof-drain replacement under GS-21? Explain.
Read the worked answer
GS-21 is a roofing license, not a general building or masonry license. Replacing membrane and associated roofing sheet metal is within scope. Rebuilding 40 linear feet of masonry parapet is masonry/structural work and is not made 'incidental' because it is next to the roof.
Roof drains are mixed: the roofing contractor may install the drain strainer, clamping ring, and flashing, but the connection to the plumbing system below the deck generally requires a plumbing license. The firm should either exclude the parapet and drain connection from its bid, require the owner to award them to separately licensed contractors, or subcontract them to properly licensed firms. The prime contractor should verify each subcontractor's license and scope before award. Bidding the whole scope as GS-21 risks rejection of the bid, CID discipline, and payment problems on work performed outside the license.
2. What must happen to the firm's license when the qualifier leaves, and how does that affect the bid?
Read the worked answer
Under New Mexico's Construction Industries Licensing Act, a contractor license is issued to the business and requires a qualifying party. The qualifier's departure means the firm may no longer have the required qualification. The firm should notify the Construction Industries Division promptly and submit a replacement qualifier who meets the requirements for GS-21. Until a replacement is approved, the firm should not bid or contract as though its license remains fully valid.
The bid due in 10 days creates a timing problem: if no replacement is in place by award, the owner may reject the bid or the license may be suspended. The certificate of insurance does not cure the qualification gap. The operations manager should contact CID immediately, document the replacement application, and consider requesting a bid extension. Do not list the departing qualifier on the bid or permit documents if he will not be associated with the firm.
3. What is the risk of using the unlicensed sheet-metal subcontractor?
Read the worked answer
Using an unlicensed sheet-metal subcontractor exposes the prime contractor to several risks. New Mexico requires contractors to be licensed for the scope of work; an unlicensed subcontractor may be prohibited from recovering payment for its work, and the prime may be disciplined for aiding unlicensed contracting. The owner's certificate of insurance and license review may reveal the problem.
The prime should verify the sub's license classification and scope, obtain a certificate of insurance, and use a written subcontract that requires compliance with licensing laws. If the sub cannot become licensed before the work, the firm should either perform the sheet metal with its own properly licensed forces if within GS-21 scope or use another licensed subcontractor. Do not let the sub 'borrow' another firm's license.